A joint venture led by Stone announced today that it has reached an agreement to acquire the under-performing Hanalei resort community from three Japanese companies doing business as Princeville Corp.

"We are truly honored to take on the stewardship of Princeville, and to help take this magnificent resort into an exciting new era," Stone said in a statement.

The transaction has entered a due diligence period, with the sale closing expected by the end of this year. The purchase price was not disclosed.

Acquisition of the 9,000-acre resort includes the 252-room Princeville Hotel, two championship golf courses, the Princeville Tennis Club and Pro Shop, Princeville Health Club and Spa, Princeville Shopping Center, and other land holdings on Kaua'i's North Shore.

Stone's Honolulu-based Hawaii Land Development Corp. teamed with Morgan Stanley Real Estate Funds, to purchase the resort.

"We will continue to position Princeville Resort as a first-class destination resort and residential community and are committed to controlled growth while making substantial resort improvements, building housing units for employees, increasing jobs for the island community, and providing a strong base of work for the construction industry," Stone said.

Princeville was developed in the early 1970s by a subsidiary of Denver-based Consolidated Oil & Gas Co., which initially built a 27-hole golf course and sold home lots. The hotel was added more than a decade later. Another 18 holes of golf opened in 1990.

Consolidated spun off Prince ville Corp. into a public company that was acquired in the late 1980s by Australian firm Qintex Ltd. In 1990, three giant Japan firms acquired Princeville Corp.

The liquor company Suntory has a 51 percent interest; the remaining 49 percent is owned by the banking company Nippon Shinpan and diversified trading company Mitsui.

Visitor industry analysts said that the Princeville resort has not performed as well as other tourism destinations, such as Po'ipu, also on Kaua'i, and that the owners have not been aggressive in developing the property.

Stone acquired the largely undeveloped Ko Olina resort with partners in 1998, and since has attracted development of hundreds of homes and a time-share complex. He has deals in the works to add an aquarium, more hotels, residential homes and time-share units.